LPS Ensures Banking Industry Performance Is Maintained

Illustration (Photo: Doc. Antara)

JAKARTA - The Deposit Insurance Corporation (LPS) ensures that the performance of the domestic banking industry is still well maintained.

"The banking industry's performance is maintained, both in terms of capital, liquidity, and intermediation functions," said LPS Board of Commissioners Purbaya Yudhi Sadive, quoted from Antara, Friday, May 26.

The fundamental condition of maintained banking is reflected in the industrial capital ratio (KPMM) which is at the level of 24.69 percent in the period March 2023.

Meanwhile, banking liquidity is also relatively maintained with an AL/DPK ratio of 26.58 percent in April 2023.

In terms of banking intermediation performance, it also continues to show improvement as seen in bank credit growth of 8.08 percent year on year (yoy).

Third Party Funds (DPK) also grew by 6.82 percent yoy.

The increase in intermediation performance was also followed by the maintenance of credit management aspects, especially after the implementation of targeted credit restructuring.

The gross non-performing loan (NPL) in the April 2023 period was at a controlled level of 2.53 percent.

Meanwhile, the ratio of risky loans or loan at risk (LAR) decreased to the level of 13.88 percent.

Furthermore, Purbaya said, the movement of national banking deposit interest rates is still in the transition stage of adjusting the direction of monetary policy in the midst of loose liquidity conditions and an increasing trend of credit demand.

LPS noted that the deposit market interest rate (SBP) for rupiah deposits was observed to increase by a limited amount of 12 bps to 3.24 percent during the observation period from April 10 to May 15, 2023.

Meanwhile, the SBP for foreign exchange deposits in the same observation period was observed to increase by 3 basis points (bps) to 1.61 percent when compared to the period of determining the guarantee interest rate (TBP) in February 2023.

"The increase in foreign exchange rates is relatively limited due to improving domestic liquidity conditions even though the Fed's potential interest rate policy is maintained higher for longer to suppress inflation," said Purbaya.